The start of a new year is a great opportunity to set our minds towards self improvement. Many of us are dusting off our gym kits as we look to make getting in shape our new year’s resolution. But whilst we’re busy working on our physical fitness, what about our financial fitness?
Our finances have such a big impact on our health, happiness and ability to achieve the things we want in life. That’s why building new money habits for 2021 can help us take steps towards a brighter future.
7 new money habits to build in 2021
1. Get out of debt, and stay out of debt
As tempting as it may be to bury our heads in the sand when it comes to our debts, it’s always much better to get it dealt with so you can move forward with your life. Particularly when working on improving your financial health, clearing your debts is the best place to start. Aim to pay off credit cards first as borrowing money this way can be extremely expensive, and debt can snowball fast. If you’re worried about your debts contact StepChange for free, straightforward advice. You can do it. We believe in you. Once you’re out of debt, staying out of debt is all about living within your means.
Budgeting isn’t just about limiting the amount of money that you spend. It’s about being intentional with your money so that you can afford to get everything that you want. It’s empowering. So decide how much you’ll spend, and on what, on a monthly basis. Then stick to it. When putting together your budget, don’t just cut out all spending on things you like to buy, like clothes or stuff on Amazon. You won’t be able to stick to it. So set yourself up for success by deciding how much you will spend on those things up front. Then if you find something you want, as long as it fits into your budget, you can have it. For more ideas, here are some top tips from Loqbox on how to budget. Another important thing to factor into your budget, is how much money you will save...
3. Save regularly
As a nation we’re not particularly good at saving money. One in six people in the UK have no savings at all, and 26% of people in the UK could cope for less than a month if they relied only on their savings to cover their outgoings. These numbers are scary. But the good news is that it doesn’t need to be difficult to start a savings habit. The trick is to start by saving small amounts, but regularly. Loqbox makes it easy to kickstart a savings habit by putting away a minimum of £20 per month. You can find out more here. And when building an emergency savings fund, a good goal is to have at least three month’s worth of bills saved up to cover your outgoings should the unexpected happen.
4. Resist impulse spending
Impulse spending can very quickly sabotage our efforts at building good habits like budgeting and saving. That’s why making a plan to curb impulse spending will help set you up for success when working on these new, and better, money habits. Hopefully your budget will help to reel back any extra spending, but in addition a top tip to try when you see something you want to buy, is to add it to a shopping list, instead of adding it to your cart and checking out. Challenge yourself to keep it on the list for a week or more, and then see if you still want. This will help to limit impulsive spending caused by boredom rather than need.
5. Set big goals
To achieve your big goals in life, you may need a big lump sum of cash and good financial health. That’s why setting a big goal will help you to focus on building good money habits. If for instance you want to buy a house in 2021, you will need to save money for a deposit, and have a good credit history so that your mortgage application is approved and that you are offered the best deals from lenders. A good credit history can save you £1000s on loans, credit cards and mortgages. So have a think, what is your one big goal for 2021? And when it comes to improving your credit history, Loqbox makes it easy for you. Find out more here.
6. Start a side hustle
One way to boost your savings is to make an extra bit of income. To do this, perhaps you could start a side hustle. Is there something you could make and sell in your free time? Or could you run online classes? Think about your unique hobbies and skills and try to identify some ideas for making some extra money. It helps if it’s something you enjoy! And if you’re a Loqbox customer, did you know that for every friend you invite we’ll give you £5? Further, until January 31st 2021 we’re also giving you and your friend the chance to double your Loqbox savings. So if you win, for every pound you save, we’ll match it. Find out more here.
7. Get the best price
Can you get everything you have now, but for less money? Shopping around to get the best price possible is a top savings tip. And it applies to many things, from doing your food shopping, to your utility bills, to renewing your car insurance. Loyalty does not always pay, but comparing prices usually does. Keep an eye on your renewal quotes as and when they come through as the insurance companies usually increase your premium with each year that passes. But did you know with a simple phone call you can challenge this? If you get a cheaper quote from a competitor you can ask them to match this, or you can even switch providers. It’s easy to do, and can save you a small fortune.
Whatever your goals are for 2021, make sure getting financially fit is on the list! This will help you to achieve the big things you want in life, and pave the way to a brighter future. Loqbox makes this easy. To find out more, visit our website.